The largest country worldwide by area, spanning over one-eighth of the Earth’s inhabited land, Russia has eleven time zones, a multitude of environments and a rich cultural mixture. The country has a colourful and often turbulent history with the defeat of the Russian Empire in World War I resulting in the seizure of power by communist forces and over half a century of dictatorial rule. The dissolution of the Soviet Union in 1991 has seen the Russian Federation introduce new legislation and the transition towards a more democratic rule.
The risks of doing business in Russia include a lack of transparency and rule of law, an ineffective bureaucracy, local authorities and government agencies, potential language barriers and regional legal variations. Furthermore, it is necessary to be aware of the current political situation and the government’s interventions into neighbouring nations.
However, economically Russia is one of the top ten largest economies by GDP according to the IMF and this produces an immense purchasing power within the country. Home to an upper-middle income mixed economy, the market reforms following the fall of communism and its era of stagnation lead to privatisation of many industries, while the state retains controls other strategic industries such as energy and defence. The sheer size of Russia means that it is home to an extensive base of mineral and energy resources, containing over 30% of the world’s natural riches. Other strengths of the Russian market are a young and well-educated workforce, good infrastructure and access to a truly global supply chains through its border with 16 other countries.
Business mentality in Russia can vary, though as a general rule etiquette remains formal. For more information on these topics, the World Business Culture website offers extensive resources and knowledge to ensure doing business in Russia is rewarding.